exploring the types of construction cost modelling for - i3Con

EXPLORING THE TYPES OF
CONSTRUCTION COST MODELLING FOR
INDUSTRIALISED BUILDING SYSTEM (IBS)
PROJECTS IN MALAYSIA
Nor Azmi Ahmad Bari
Universiti Putra Malaysia

Introduction:
Construction cost is an important element that should be monitored
at different phases of the building construction process.
Construction cost is a factual process designed to give a reliable
le
estimation or prediction of its financial cost.
Cost estimating is
‘a a fundamental activity which combine of a mechanical process and
subjective expertise undertaken to assess and predict the total cost
executing of construction works. It consists of application of appropriate
methods of estimating to the measures finished quantities of appropriate
building’.
The purpose of construction cost estimation is to provide information
for construction decisions including areas in the procurement and
pricing of construction, establishing contractual amount of payment,
and controlling actual quantities.

Introduction
As the construction industry is encouraged to adopt innovation in its
trade, it came to the industry players’ fore to review the prevalent
method of cost estimation for cost planning and control of IBS
projects.
Drawing from that, and appreciating the need to reform the
construction industry’s s practices, it was conceived that reviewing the
existent construction cost modelling used in the preparation of cost
planning and control for IBS projects would be most expedient and
vital
Its strength should be the ability to adhere and remain relevant to
the ever-changing technology and design dynamics being
manifested from a progressive construction process.

Definition:
Industrialised Building System (IBS)
Author/Researcher
CIDB, 2003b
Trikha, 1999
Warszawski, 1999
Esa and Nuruddin, 1998
Wardi, 1997
Junid, 1986
Definition
A construction system which components are manufactured in a
factory, on or off site, positioned and assembled into structures
with minimal additional site work
A system in which concrete components such as wall, floor slab,
beam, column and staircase are mass produced at site or in factory
are assembled to form the structure with minimum in situ
construction.
A set of interconnected elements that joint together to enable the
designated performance of a building.
IBS is a continuum beginning from utilizing craftsmen for every
aspect of construction to a system that make use of manufacturing
production in order to minimize resources wastage and enhance
value for end users.
A system which uses industrialized production techniques either in
the production techniques either in the production of components
or assembly of the building or both.
IBS is a process by which components of a building are conceived,
planned and fabricated, transported and erected at site. The
system includes a balanced combination between software and
hardware component. The software element include system
design, which is a complex process of studying the requirement of
the end user, market analysis and the development of standardized
components.

Definition:
Industrialised Building System (IBS)
CIDB, Malaysia
‘A A construction system which components are
manufactured in a factory, on or off site,
positioned and assembled into structures with
minimal additional site work’

Definition:
Industrialised Building System (IBS)
Classification of types of IBS according to CIDB;
Type 1: Precast Concrete Framing, Panel and Box
Systems
Type 2: Steel Formwork Systems
Type 3: Steel Framing Systems
Type 4: Prefabricated Timber Framing Systems
Type 5: Blockwork Systems

Definition:
Cost Modelling
Ferry et al. (1997)
“The symbolic representation a system, expressing the content of that
system in terms of the factors which influence its costs”.
Seeley (1996)
“a a procedure developed to reflect, by means of derived processes,
adequately acceptable output for an established series of input
data”.
Ashworth (1999)
“techniques used for forecasting the estimated cost of a proposed
construction project”.
Therefore, all methods, techniques or procedures used by quantity
surveyors for cost estimation or cost forecast may be termed as cost
models.

Type of Construction Cost Modelling
Cost estimation models can be classified into three main
generations:
i. Traditional model
Conference,
Financial method,
Functional unit,
Superficial,
Superficial-perimeter,
perimeter,
Cube,
Storey enclosure,
Approximate quantity,
Bill of quantities.

Type of Construction Cost Modelling
ii.
iii.
Non-traditional model
Statistical / Econometric model (Regression analysis and Causal model),
Risk / Simulation model (Monte Carlo simulation and Value
management),
Knowledge-based model,
Resource-based model,
Life cycle model.
New wave model
Artificial intelligent system (Neural network and Fuzzy logic),
Other models (Environmentally and Sustainable development).

Type of Construction Cost Modelling
Choices of estimation models will be influenced by many factors:
Information and time available
Experience of the estimator/quantity surveyor
The amount and form of cost data
Purpose of the estimates
Techniques to be adopted

Objective of the Study
To identify the most widespread or preferred
incidence-in
in-use (IIU) of cost estimation
model being employed by the Malaysian
QS for projects using IBS.

Methodology
Adopted a self-administered, 6 pages postal
questionnaire
The questionnaires were sent to all QS firms
registered with Board of Quantity Surveyors,
Malaysia (N=278)
15% firms responded and than computed and
analysed descriptively using SPSS.

Analyses of Data
Demographic profile of the respondents
Majority (94.9%) have between 10-30 years of working experience
in construction industry.
Majority (61.5%) have between 1-101
10 years of working experience in
the organisation
Majority (64%) posses a high level of academic qualification; ie.
Degree holders.
Majority covers a spectrum of high ranking personnel in which half
(52.7%) of the respondents belong to the Top Management level,
such as director, principal, managing here director, etc.
Therefore, the information provided by the respondents can be
considered as highly reliable and authoritative.

Currently-used used Cost Estimation Model
Table 1: Incidence-in-use (IIU) of Traditional Types of Cost Estimation Model
Modelling Average Point Average Incidence-in-use
Rank
(IIU), N= 41
Conference 2.2 1% - 33% 8
Financial method 2.9 1% - 33% 6
Functional unit 3.0 34%-66% 5
Superficial 3.9 34%-66% 2
Superficial-perimeter 2.2 1% - 33% 7
Cube 1.8 0% 10
Storey-enclosure 2.1 1% - 33% 9
Approximate quantities 4.0 67%-99% 1
Elemental estimating 3.7 34%-66% 4
Bill of quantities 3.9 34%-66% 3

Currently-used used Cost Estimation Model
Table 2: Incidence-in-use (IIU) of Newer Non-Traditional Types of Cost Estimation Model
Modelling Average Point Average Incidence-inuse
Rank
(IIU), N=41
Regression analysis 1.5 0% 4
Causal model 1.5 0% 5
Monte Carlo
1.3 0% 6
simulation
Value management 2.4 1% - 33% 1
Knowledge-based
1.3 0% 7
model
Resource-based model 2.0 1% - 33% 2
Life-cycle model 1.7 0% 3

Currently-used used Cost Estimation Model
Table 3: Incidence-in-use (IIU) of New Wave Types of Cost Estimation Model
Modelling Average Point Average Incidencein-use
Rank
(IIU), N=41
Neural network 1.2 0% 2
Fuzzy logic 1.2 0% 3
Environmentally &
Sustainable development
1.6 0% 1

Findings
Traditional types of cost model were, in general, still the most widely
used.
The newer, only the value management, resource based model, and
life-cycle cost model costs being in general use.
Brandon (1982), had proposed to the construction industry to shift
towards a more innovative and dynamic cost model
From the study, it can be surmised that the continued and
overwhelming use of the traditional types of cost model at the
expense of the newer non-traditional types have somewhat
stigmatised Brandon’s s call for paradigm change.

Findings
Reasons why the traditional cost estimation modellings is still being
widely used :
1. lack of familiarity with the newer techniques;
2. time constrain, plus lack of information and knowledge;
3. doubts whether these techniques are replicable to other projects;
4. most construction projects are not large enough to warrant the use u
of these techniques or research into them;
5. they require the availability of sound data to ensure confidence;
e;
6. the degree of sophistication is seen as too superfluous for an
average project;
7. the vast majority of risks are contractual or construction-related, related, and
are fairly subjective such that they can be dealt with better on the
basis of personal experience or from previous contracts undertaken
en
by the company.

Conclusion
The traditional type of cost estimation models continue to
be in widespread use irrespective of organisational type
and size.
This phenomenon is comparable to findings from other
similar researches conducted in countries like the UK,
Hong Kong, Australia and Nigeria.

Conclusion
An appraisal or review of the cost estimation practices in
construction projects is essential particularly of those
using IBS.
This is vital in order for IBS to be well placed, and
accordingly evolve with the various innovations that
transpire within construction industry.
If need be, the appraisal must also be re-strategised
to
take advantage of the various benefits presented by the
newer non-traditional and new wave cost estimation
models in cost planning and control practices.